Chopping Block: Ending Tax Exemptions

Part of a continuing series — As the Texas Legislature continues to struggle with closing the state’s $15-27 billion budget shortfall, we’ve solicited readers for their opinions on what state leaders should do to help close the budget gap.

A reader wrote in to ask us how much could be generated by sending the current exemptions in Texas’ current tax code.

According to Dick Lavine at the Center for Public Policy Priorities, the money the state has left on the table when it comes to tax exemptions amounts to billions of dollars.

He said that if the high cost natural gas tax exemption, has been so fiercely debated this session, was ended the state could bring in an additional $1 billion.

He said that there are also a great many services and business activities that aren’t covered by the sales tax — like lawyer fees, consulting fees and other similar services. Taxing all of those services could generate several billion dollars for the state.

Lavine pointed to a proposal brought forward by Sen. Wendy Davis, D-Fort Worth, which would have applied the sales tax to custom computer programming, as an example. Taxing those services would have added an additional $325 million in revenue to the state’s budget.